Bloomberg News

3M Says 2012 Sales May Climb 6% on Boost From Acquisitions

December 06, 2011

(Updates with closing share price in eighth paragraph.)

Dec. 6 (Bloomberg) -- 3M Co. said revenue may increase as much as 6 percent next year amid growth in existing businesses and a boost from mergers and acquisitions.

Sales may be $30.2 billion to $31.5 billion, according to presentations today on the company’s website, in line with the $30.6 billion average estimate of analysts surveyed by Bloomberg. The maker of Scotch-Brite sponges and Nexcare thermometers and adhesive bandages expects earnings per share of $6.25 to $6.50 next year, also tracking estimates.

3M will repeat its approach of keeping costs low and investing in more-profitable and innovative products such as Cubitron II abrasives that have shark-tooth-shaped grains to increase sales and competitive advantages, Buckley said. The St. Paul, Minnesota-based company said forecasting is difficult because of economic turmoil.

“We have no sense of any settlement of the turbulent global situation,” Chief Executive Officer George Buckley said on a webcast of a meeting with investors in New York. “The economy is much more likely to grow slowly than collapse.”

Western Europe’s economy “seems to be getting worse” and there is more uncertainty in 3M’s “thought consciousness” than there was previously, Buckley said.

“If we have a tough situation next year, and I don’t think it’s going to be this tough, we will follow the same model,” he said.

Acquisitions, Exchange Rates

Acquisitions already announced such as foam-core materials maker Nida-Core Corp. and vehicle graphics firm Original Wraps Inc. may boost 2012 revenue by about 1 percent and future purchases may add as much as 3 percent more, 3M said. Currency exchange rates may curb revenue as much as 2 percent.

3M rose 1.5 percent to $82.13 at the close in New York. The shares have declined 4.8 percent this year.

The midpoint of 3M’s 2012 earnings forecast is $6.38 a share, which was “better than expected,” C. Stephen Tusa, an analyst at JPMorgan Chase & Co., wrote in a note to clients.

The average of 17 analysts’ estimates compiled by Bloomberg was $6.27.

3M reaffirmed its 2011 per-share profit forecast of $5.85 to $5.95. The company had lowered that projection from $6.10 to $6.25 on Oct. 25 when it posted third-quarter earnings that trailed analysts’ estimates for the first time in 10 quarters.

That reduction implied a “weaker fourth quarter” and makes the 2012 forecast “less conservative,” Tusa wrote.

Buckley, whose contract as CEO ends on his 65th birthday in February, has declined to comment on whether he will continue afterward and didn’t address retirement at today’s meeting.

Speculation that Buckley will step down next year increased after 3M in May named Inge Thulin as chief operating officer, a newly created position.

--With assistance from Thomas Black in Dallas. Editors: James Langford, John Lear

To contact the reporters on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net; Natalie Doss in New York at ndoss@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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